Electronics Industry Demand on Rise
BANNOCKBURN, IL – Orders, capacity utilization and backlogs all increased of late, pushing electronics industry demand higher according to IPC’s February Sentiment of the Global Electronics Manufacturing Supply Chain Report.
The results are based upon the findings of an IPC survey fielded between Jan. 16-31.
The Demand Index is at its highest level since May 2024. Profit margins remain under pressure, but the Profit Margin Index has risen for the second consecutive month.
Though labor and material costs continue to rise and labor challenges persist as labor markets remain tight, the outlook for shipments, orders, backlogs and capacity utilization is expected to improve, reflecting strong optimism.
About 65% of manufacturers report they are not pulling forward shipments due to tariff risks, though 18% are adjusting fewer than 10% of shipments.
“The majority of electronics manufacturers are maintaining their current shipment schedules, opting not to expedite deliveries despite potential tariff implications,” said Shawn DuBravac, Ph.D., IPC chief economist and report author.
Asked about shipping surcharges, 72% of respondents stated they have not experienced shipping surcharges beyond expectations, and 70% do not anticipate new surcharges in the next 60 days.
Additional survey data show:
- Nearly three-fifths (56%) of electronics manufacturers are currently experiencing rising labor costs, with half (50%) reporting rising material costs.
- Labor and material costs remain elevated across all regions, with the highest diffusion index in North America.
- The ease of recruiting skilled labor remains a persistent challenge across all markets and has worsened in the past month.
Hot Takes
Worldwide semiconductor revenue in 2024 totaled $626 billion, an increase of 18.1% from 2023. (Gartner)
After declining in the first half of 2024, electronics sales bounced back to a 2% annual increase. Sales rose 4% in the fourth quarter and are expected to rise 1% in the current period. (SEMI/TechInsights)
North American EMS shipments fell 2.4% in January compared to the same month last year and dropped 1.8% from December. Bookings slipped 1.2% year-over-year and decreased 15.6% from the previous month. (IPC)
Businesses will spend more than $30 billion on AI-related infrastructure, platforms, software and services to support their ability to compete on highly personalized customer experiences. (IDC)
The number of printed circuit board manufacturers in Europe fell to 188 in February. (Data4PCB)
North American PCB shipments in January rose 19.9% compared to 2024 and were up 10.1% sequentially. Bookings were up 44.1% and 1.1%, respectfully. (IPC)
Global LCD gaming monitor panel shipments (>144Hz) rose 12% annually to 32.4 million units in 2024, but growth in 2025 is expected to slow to 5%, or about 34 million units. (TrendForce)
India’s electronics industry accounts for just 4% of the global market and remains primarily focused on assembly, with limited progress in design and component manufacturing, an economic survey found. (DGCI&S)
The Indian government’s target of an electronics production value of $500 billion could face a serious challenge due to US tariffs (Business Standard)
Taiwanese copper-clad laminate exports grew 21.3% year-over-year in December. (TPCA)
Seven EMS transactions were recorded in the fourth quarter of 2024, reflecting a decrease from eight in 2023’s fourth quarter and 12 in the fourth quarter of 2022. Vertical and horizontal convergence accounted for four transactions, and consolidations made up two transactions. (Lincoln International)
Oversupply in the NAND flash market continued in the first quarter, leading to sustained price declines, but significant improvement in the market’s supply-demand balance is expected in the second half of the year. (TrendForce)
Indian electronic goods exports increased by 79% in January to $4.11 billion. (India Ministry of Commerce & Industry) 
